According to the May 21, 2018 Platinum Market Review, The World Platinum Investment Council/SFA released its latest Platinum Quarterly report for the first quarter of 2018 with its analysis finding that a market deficit in platinum of 125,000 ounces had occurred by the end of Q1 against a market surplus of 90,000 ounces in the final quarter of 2017.
Estimates for the first quarter of 2018 point to a 3.7% q/q decrease in overall demand of 1.975 million ounces with a 2.9% q/q decline in automotive demand, a 5.9% q/q fall in platinum jewelry consumption and a substantial drop in investment products (36.8% q/q) characterized by a large loss of ETF inflows partially offset by a rise in physical offtake of coins and bars.
Industrial demand improved in Q1 increasing 6.1% q/q. However, platinum supplies fell more than demand in Q1 as mine production dropped 11.9% q/q to 1.405 million ounces with sizable declines from South Africa (-12.0%), Zimbabwe (-17.9%) and Russia (-15.4%); recycling totals were lower by 13.5% in Q1 at 450,000 ounces largely on a 15.8% fall in autocat recoveries.
The Council predicts that the market will be in surplus again through the balance of 2018, with platinum supplies exceeding demand by an estimated 175,000 ounces, down from the 2017 estimate of 315,000 ounces, as outlined in the table above.
For 2018, the WPIC is projecting total market supplies to be 7.970 million ounces for a 1.4% y/y decrease as primary South African platinum outturn recovers (-0.7% y/y) from Q1 losses and secondary supplies from autocat recycling rise 4.9% y/y as higher palladium, rhodium and scrap steel prices encourage collectors; jewelry recycling slips 1.8% y/y, however.
Overall demand is fractionally higher in 2018 (+0.4%) at 7.795 million ounces but still below total supplies as a 2% gain in jewelry consumption, benefiting from a turnaround in Chinese sales, and a 5.7% higher industrial offtake is offset by a 3.1% decline in automotive demand as European diesel sales continue to suffer.
Material contained in this report is based upon publicly available market data believed to be accurate and reliable and is presented for informational purposes only. KMR assumes no warranty or liability for its completeness, nor guarantees future market performance. Further, KMR assumes no liability for direct or indirect loss or damage from the use of information contained in this report, or from any unforeseen errors or omissions.